Consortium and Joint Venture Bidding

Abstract

The terms ‘consortium’ and ‘joint venture’ are often used in connection with construction work, particularly for large and/or complex projects, many of which are located in the less developed areas of the world. Involvement in such projects may pose particular problems for construction contractors because:

• 1. The projects themselves areoften both large and complex, and may pose special risks in terms of their cultural, geographical and political environment.

• 2. Most tenders for construction work are usually prepared by one company acting alone and in competition with other similar firms, and most construction contractors are therefore not accustomed to tendering as part of a team

• 3. A substantial number, perhaps most, consortia and joint venture organisations are set up to handle specific one-off projects, and it is therefore usually necessary to re-establish the necessary management and administrative organisations afresh for each new project.

• 4. An increasing number of consortium and joint venture projects also require the joint venture sponsor to arrange the necessaryfinance to carry out the work.